| | | I assume you know that VXX is one of the most shorted tickers being traded. Due to the nature of it's underlying "bets", it will always fade over time. When "massive" short positions are in place, it's going to take some serious fear to change the direction the river is flowing, so to speak.
Trying to trade VXX is all about timing and ranges, IMO. You can play for snap back spikes after the price has fallen (day trade or short term swing moves) or you can play for a "black swan" moment. Otherwise, it's a long term short that will always win if you have enough time to be patient. Large spikes up simply create a new opportunity to place a new short position. Look at the chart below for "intermediate" reference...down, small spike, down, repeat...but always down....
Grabbing a very quick 7% or 15% is not that unusual but, once again, timing is everything. Also, there's a difference between how SPY is moving and the way the S+P500 futures options are being traded. Simply because SPY is up does not mean that the options are "anticipating" more up.
Whether you see the massive trades after hours as manipulation or simply a better view of a large trade that would normally be masked during regular trading hours, is in the eye of the beholder....at least that's how I see it but I'm always open for new views on how "things work"!!
What is interesting is the length of time since the last substantial spike up. I think it's drawn nearly everyone's attention and the current low VIX numbers are constantly being referenced by those who follow TA.
I am curious about your "New Algo" theory in TVIX?
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